Question 3 Consider the Endogenous (human capital) Growth Model with the representative consumer. The efciency parameter of human capital accumulation technology is b 2 5. The total productivity factor is given by z : 60. Denote by Hi the human capital accumulated in period t, and by at the time spent working in period t. Assume an : 0.85 and H0 2 1. 1. Compute the consumer consumption Ct for periods 0 and 1. 2. Starting from year 2, the government applies a policy that raises b to 9. Now assume that in face of this increased value of human capital in the economy, the consumer responds optimally by decreasing at to 0.75. Calculate the consumption Ct for periods 2 and 3